5 Tax Saving Valentines Day Gifts

Valentines Day is known across the country as a day to give gifts to your loved ones (that is 2 weeks from this Thursday, for all you “Forgetful Freds” out there). But this date just so happens to fall in the middle of tax season, when taxpayers across the country have taxes in the mind. But do not be worried, there are a few gifts you can give that might also help you lower your tax liability. So if you had to write a big check to the IRS last year you may want to try one of the following tax saving valentines day gifts.

1. Give Money to a Spouse

If you and your spouse are both American citizens, then you can transfer money directly to your spouse. You will not have to pay any taxes on the transfer and it will actually lower your overall tax liability. However, it will have an adverse effect and raise your spouse’s liability.

2. Setup a Retirement Account

What better way to celebrate Valentines Day than by planning for your future? If you are married you can setup a retirement account for you and your spouse. You can transfer additional funds into this account which will help lower your tax liability.

3. Make a Charitable Contribution

Making a charitable donation in you’re the name of your loved one can be an excellent Valentine’s day gift. It will not only show them you care about charitable causes, but you can also deduct the expense as a charitable contribution. Just be sure keep proof of your contribution!

4. Pay College or Medical Bills

By offering to pay for a loved ones college or medical bills you can help them out while also getting a tax deduction. The IRS allows you to deduct these expenses as long as you mail in the bill yourself so that you have proof.

5. Give a Business Branded Gift

If you own a business you can always purchase some type of product that bears your company logo and write it off as a business expense. This may not seem like the most romantic of gifts, but now days you can have your logo printed on just about anything. Try considering a bathrobe with a small logo on the front, or custom chocolates.

IRS Reached 2.3 Billion Dollar Agreement

On Valentines day the IRS announced they had reached a 2.3 billion dollar deal to resolve several tax disputes with Merck & Co., Inc. and its subsidiaries. Among the issues resolved were a few issues that resulted from the company’s use of minority equity interest financing transactions. The 2.3 billion dollar payment to the United States federal government is said to resolve the tax issues for the tax years 1993-2001. Although the settlement is one of the largest in IRS history, it is 40% below the $3.8 billion the IRS originally said it was seeking in November. Source: MarketWatch.com.